PrefBlog

DBRS has announced that it:

has today placed the Issuer Rating, Preferred Shares and Senior Unsecured Debentures of Bombardier Inc. (BBD or the Company) Under Review with Negative Implications. The rating action mainly reflects the recent deterioration in the financial profile, caused by rising debt levels. This is largely due to the elevated capital outlays associated with the C-series aircraft program, resulting in large negative free cash flows, further borrowing and higher leverage as evident during the most recent earnings release. The C-series program is being pushed further out, as delays in the overall systems integration of the flight test vehicle have caused the Company to postpone first test flight and entry-into-service dates.

DBRS will likely remove the rating from Under Review with Negative Implications and downgrade Bombardier if the financial profile metrics do not show improvement from current levels or if they deteriorate further by the end of the third quarter of this fiscal year. Additionally, DBRS would downgrade the rating should the Company announce further program delays, or continue to have similar levels of capital outlays, negative free cash flows and leverage during the same time frame.

Bombardier has three series of preferreds outstanding: BBD.PR.B (Ratchet Rate); BBD.PR.C (PerpetualDiscount) and BBD.PR.D (FixedFloater). All are tracked by HIMIPref™; all are assigned to the Scraps index on Credit concerns.

This entry was posted on Tuesday, August 6th, 2013 at 9:19 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.